The deal that has resulted in Tata offloading part of its troubled UK steel business to Greybull Capital has been credited with saving jobs, although the private equity firm’s record after taking over other struggling companies may not leave its new employees entirely reassured.
The single-page website of Greybull Capital LLP, headquartered in Knightsbridge, central London, gives little away, but its directors insist that they are “long-term investors” and that the reputation it acquired – after the collapse of the electrical goods retailer Comet – as a secretive firm looking for a kill is misplaced.
Greybull was founded in 2008 by Nathaniel and Marc Meyohas, the wealthy French-born brothers, along with family friend Richard Perlhagen – a former Lehman Brothers banker, like Nathaniel – to invest the family fortune. All three are now UK residents and were joined at Greybull by a fourth partner, Daniel Goldstein.
The company first came to public prominence as investors in OpCapita’s controversial takeover of Comet in 2011, shortly before it went into administration, which led to accusations that Greybull profited while thousands lost their jobs and other creditors lost millions. The reference still rankles with Marc Mehoyas, who told the Guardian on Monday: “We were not involved as a significant shareholder – but someone released our names as the main backers. That was far from the truth.”
A happier investment has been the £75m Greybull put into Monarch, helping to secure the UK’s oldest surviving airline brand – although pilots and crew were forced to accept a rescue deal that included pay cuts of 30%, reductions to pilots’ pensions and 700 redundancies. The airline’s fleet was reduced and its route network pared back to the most lucrative destinations as Monarch returned to profit, making £40m in 2015, aided by tumbling oil prices.
After 17 months, Greybull was reported to be considering a sale of Monarch at a large profit. However, Meyohas insisted: “There’s no sale process going on. The turnaround has been good – we don’t have any exit plans. Deutsche Bank has presented us with M&A [mergers and acquisitions] growth opportunities. That story got translated and spiralled.”
Since 2014, the contact details of representatives at PR firm Bell Pottinger have been found on Greybull’s website. Meyohas said this reflects the more high-profile investments that Greybull is now making, but added: “We make no bones about the fact we are a family office, so we don’t need to shout off the rooftops about what we do.”
He said “some of the lingo” used to describe Greybull was wrong and that the firm did not seek publicity as it was not a private equity fund looking to raise money. “We’re professional people, we’re not looking for stardom, just trying to help the companies and help them grow,” he said.
For the rescued Tata division, to be renamed British Steel, Meyohas said: “What we bring to the table is a period of stable ownership for the business, capital, and committed investors to growth.”
As well as the £400m investment package, he said Greybull had “some expertise in turnaround and helping firms through choppy waters”. Meyohas said they would expect Greybull to retain its steel interest until 2026 at the minimum. “That’s the basis on which we invest – if in 10 years or more we’d still be happy with being shareholders.”
Although Perlhagen qualified that the period could be less than 10 years if a buyer or a merger opportunity came along, Meyohas said: “In our world, we’re not into exit plans. We’re buying it because we think it’s a viable long-term business.
“We are believers in the plan, and the people, and the fact is that while [steel] is pretty battered and a sector that is getting a lot of negative publicity, we think it’s a plan worth backing.”
